Question: Blues Construction Corp. has consistently used the percentage-of-completion method. During 2020, Blues entered into a fixed-price contract to contract an office building for $6,000,000. Information

Blues Construction Corp. has consistently used the percentage-of-completion method. During 2020, Blues entered into a fixed-price contract to contract an office building for $6,000,000. Information relating to the contract is as follows:

At December 31

2020 2021

Percentage of completion 15% 45%

Estimated Total cost at completion $4,5000,000 $4,800,000

Gross Profit Recognized (Cumulative). 225,000. 540,000

Under the earnings approach, contract costs incurred during 2021 were:

a) 1,485,000

b) 1,575,000

c) 2, 160,000

d) 1,440,000

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